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The term "Microcomputer" came into popular use after the introduction of the minicomputer, although Isaac Asimov used the term microcomputer in his short story "The Dying Night" as early as 1956 (published in The Magazine of Fantasy and Science Fiction in July that year). Most notably, the microcomputer replaced the many separate components that made up the minicomputer's CPU with a single integrated microprocessor chip.

The earliest models often sold as kits to be assembled by the user, and came with as little as 256 bytes of RAM, and no input/output devices other than indicator lights and switches, useful as a proof of concept to demonstrate what such a simple device could do.

However, as microprocessors and semiconductor memory became less expensive, microcomputers in turn grew cheaper and easier to use:

Increasingly inexpensive logic chips such as the 7400 series allowed cheap dedicated circuitry for improved user interfaces such as keyboard input, instead of simply a row of switches to toggle bits one at a time.

Use of audio cassettes for inexpensive data storage replaced manual re-entry of a program every time the device was powered on.

Large cheap arrays of silicon logic gates in the form of Read-only memory and EPROMs allowed utility programs and self-bootingkernels to be stored within microcomputers. These stored programs could automatically load further more complex software from external storage devices without user intervention, to form an inexpensive turnkey system that does not require a computer expert to understand or to use the device.

All these improvements in cost and usability resulted in an explosion in their popularity during the late 1970s and early 1980s.

A large number of computer manufacturers packaged microcomputers for use in small business applications. By 1979, many companies such as Cromemco, Processor Technology, IMSAI, Northstar, Southwest Technical Products Corporation, Ohio Scientific, Altos, Morrow Designs and others produced systems designed either for a resourceful end user or consulting firm to deliver business systems such as accounting, database management, and word processing to small businesses. This allowed businesses unable to afford leasing of a minicomputer or time-sharing service the opportunity to automate business functions, without (usually) hiring a full-time staff to operate the computers. A representative system of this era would have used an S100 bus, an 8-bit processor such as a Intel 8080 or Zilog Z80, and either CP/M or MP/M operating system.

Everyday use of the expression "microcomputer" (and in particular the "micro" abbreviation) has declined significantly from the mid-1980s onwards, and is no longer commonplace. It is most commonly associated with the first wave of all-in-one 8-bithome computers and small business microcomputers (such as the Apple II, Commodore 64, BBC Micro, and TRS 80). Although—or perhaps because—an increasingly diverse range of modern microprocessor-based devices fit the definition of "microcomputer," they are no longer referred to as such in everyday speech.

In common usage, "microcomputer" has been largely supplanted by the description "personal computer" or "PC," which describes that it has been designed to be used by one person at a time. IBM first promoted the term "personal computer" to differentiate themselves from other microcomputers, often called "home computers", and also IBM's own mainframes and minicomputers. Unfortunately for IBM, the microcomputer itself was widely imitated, as well as the term. The component parts were commonly available to manufacturers and the BIOS was reverse engineered through cleanroom design techniques. IBM PC compatible "clones" became commonplace, and the terms "Personal Computer," and especially "PC" stuck with the general public.

Since the advent of microcontrollers (monolithic integrated circuits containing RAM, ROM and CPU all onboard), the term "micro" is more commonly used to refer to that meaning.[citation needed]

Monitors, keyboards and other devices for input and output may be integrated or separate. Computer memory in the form of RAM, and at least one other less volatile, memory storage device are usually combined with the CPU on a system bus in a single unit. Other devices that make up a complete microcomputer system include, batteries, a power supply unit, a keyboard and various input/output devices used to convey information to and from a human operator (printers, monitors, human interface devices) Microcomputers are designed to serve only a single user at a time, although they can often be modified with software or hardware to concurrently serve more than one user. Microcomputers fit well on or under desks or tables, so that they are within easy access of the user. Bigger computers like minicomputers, mainframes, and supercomputers take up large cabinets or even a dedicated room.

A microcomputer comes equipped with at least one type of data storage, usually RAM. Although some microcomputers (particularly early 8-bit home micros) perform tasks using RAM alone, some form of secondary storage is normally desirable. In the early days of home micros, this was often a data cassette deck (in many cases as an external unit). Later, secondary storage (particularly in the form of floppy disk and hard disk drives) were built in to the microcomputer case itself.

Although they contained no microprocessors but were built around TTL logic, Hewlett-Packard Calculators as far back as 1968 had various levels of programmability such that they could be called microcomputers. The HP 9100B (1968) had rudimentary conditional (IF) statements, statement line numbers, Jump statements (Go to), registers that could be used as variables, and primitive subroutines. The programming language resembled Assembly language in many ways. Later models incrementally added more features, including the BASIC programming language (HP 9830A in 1971). Some models had tape storage and small printers. However, displays were limited to a single line at a time. [1] The HP 9100A was referred to as a personal computer in an advertisement in a 1968 Science magazine[4] but that advertisement was quickly dropped.[5] It is suspected[attribution needed] that HP was reluctant to call them "computers" because it would complicate government procurement and export procedures.[citation needed]

The Datapoint 2200, made by CTC in 1970, is perhaps the best candidate for the title of "first microcomputer". While it contains no microprocessor, it used the 4004 programming instruction set and its custom TTL logic was the basis for the Intel 8008, and for practical purposes the system behaves approximately as if it contains an 8008. This is because Intel was the contractor in charge of developing the Datapoint's CPU but ultimately CTC rejected the 8008 design because it needed 20 support chips.[6]

Another early system, the Kenbak-1, was released in 1971. Like the Datapoint 2200, it used discrete TTL logic instead of a microprocessor, but functioned like a microcomputer in most ways. It was marketed as an educational and hobbyist tool, but was not a commercial success; production ceased shortly after introduction.[2]. Another system of note is the Micral-N, introduced in 1973 by a French company and powered by the 8008; it was the first microcomputer sold completely assembled and not as a construction kit.

Virtually all early microcomputers were essentially boxes with lights and switches; one had to read and understand binary numbers and machine language to program and use them (the Datapoint 2200 was a striking exception, bearing a modern design based around a monitor, keyboard, and tape and disk drives). Of the early "box of switches"-type microcomputers, the MITS Altair 8800 (1975) was arguably the most famous. Most of these simple, early microcomputers were sold as electronic kits--bags full of loose components which the buyer had to solder together before the system could be used.

The period from about 1971 to 1976 is sometimes called the first generation of microcomputers. These machines were for engineering development and hobbyist personal use. In 1975, the Processor TechnologySOL-20 was designed, which consisted of a single board which included all the parts of the computer system. The SOL-20 had built-in EPROM software which elimated the need for rows of switches and lights. The MITS Altair just mentioned played an instrumental role in sparking significant hobbyist interest, which itself eventually led to the founding and success of many well-known personal computer hardware and software companies, such as Microsoft and Apple Computer. Although the Altair itself was only a mild commercial success, it helped spark a huge industry.

1977 saw the introduction of the second generation, known as home computers. These were considerably easier to use than their predecessors, whose operation often demanded thorough familiarity with practical electronics. The ability to connect to a monitor (screen) or TV set allowed for visual manipulation of text and numbers. The BASIC programming language, which was easier to learn and use than raw machine language, became a standard feature. These features were already common in minicomputers, which many hobbyists and early manufactures were familiar with.

1979 saw the launch of the VisiCalcspreadsheet (initially for the Apple II) that first turned the microcomputer from a hobby for computer enthusiasts into a business tool. After the 1981 release by IBM of their IBM PC, the term Personal Computer became generally used for microcomputers compatible with the IBM PC architecture (PC compatible).

↑. An early use of the term "personal computer" in 1962 predates microprocessor-based designs. (See "Personal Computer: Computers at Home" reference below). A "microcomputer" used as an embedded control system may have no human-readable input and output devices. "Personal computer" may be used generically or may denote an IBM PC compatible machine.